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Unemployment Durations and Extended Unemployment Benefits in Local Labor Markets

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  • Å tÄ›pán Jurajda
  • Frederick J. Tannery

Abstract

Many empirical studies have confirmed the theoretical prediction that longer-term Unemployment Insurance (UI) entitlement leads to longer unemployment duration. Most of those studies have examined special programs that provide extra weeks of unemployment benefits when unemployment rates in the region are higher. Hence, they must distinguish if the longer unemployment duration among UI claimants observed in these cases is due to the extended benefits or to the adverse labor market conditions that trigger those extensions. In contrast, this paper measures the effect of identical entitlement extensions across two labor markets facing very different demand conditions—Pittsburgh and Philadelphia, over the years 1980–85. The results confirm findings of the existing literature and indicate that the adverse effect of longer entitlement changes relatively little in response to variation in demand conditions.

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  • Å tÄ›pán Jurajda & Frederick J. Tannery, 2003. "Unemployment Durations and Extended Unemployment Benefits in Local Labor Markets," ILR Review, Cornell University, ILR School, vol. 56(2), pages 324-348, January.
    • Handle: RePEc:sae:ilrrev:v:56:y:2003:i:2:p:324-348
    DOI: 10.1177/001979390305600207
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    Cited by:

    1. Camille Landais & Pascal Michaillat & Emmanuel Saez, 2010. "A Macroeconomic Theory of Optimal Unemployment Insurance," NBER Working Papers 16526, National Bureau of Economic Research, Inc.
    2. Arthur Sweetman & Matthew D. Webb & Casey Warman, 2014. "How Targeted Is Targeted Tax Relief? Evidence From The Unemployment Insurance Youth Hires Program," Working Paper 1298, Economics Department, Queen's University.
    3. Li, Xianghong & Smith, Barry, 2015. "Diagnostic analysis and computational strategies for estimating discrete time duration models—A Monte Carlo study," Journal of Econometrics, Elsevier, vol. 187(1), pages 275-292.
    4. Walter Nicholson & Karen Needels, "undated". "The EUC08 Program in Theoretical and Historical Perspective," Mathematica Policy Research Reports 9046cb11c3aa44c8a036a6e38, Mathematica Policy Research.
    5. Robert Valletta, 2014. "Recent extensions of U.S. unemployment benefits: search responses in alternative labor market states," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-25, December.
    6. Adam Čabla & Ivana Malá, 2017. "Využití metod analýzy přežití pro modelování doby nezaměstnanosti v České republice [The Use of Survival Analysis Methods for the Modelling of Unemployment in the Czech Republic]," Politická ekonomie, Prague University of Economics and Business, vol. 2017(4), pages 501-519.
    7. Landais, Camille & Michaillat, Pascal & Saez, Emmanuel, 2010. "Optimal unemployment insurance over the business cycle," LSE Research Online Documents on Economics 35596, London School of Economics and Political Science, LSE Library.
    8. Randall W. Eberts & Christopher J. O'Leary, 2003. "A New WPRS Profiling Model for Michigan," Book chapters authored by Upjohn Institute researchers, in: Joshua Riley & Aquila Branch & Stephen Wandner & Wayne Gordon (ed.),A Compilation of Selected Papers from the Employment and Training Administration's 2003 Biennial National Research Conference, ETA Occasional Paper 20, pages 130-184, W.E. Upjohn Institute for Employment Research.
    9. Solomon W. Polachek & Jun (Jeff) Xiang, 2006. "The Effects of Incomplete Employee Wage Information: A Cross-Country Analysis," Research in Labor Economics, in: The Economics of Immigration and Social Diversity, pages 35-75, Emerald Group Publishing Limited.
    10. Moyen, Stéphane & Stähler, Nikolai, 2014. "Unemployment Insurance And The Business Cycle: Should Benefit Entitlement Duration React To The Cycle?," Macroeconomic Dynamics, Cambridge University Press, vol. 18(3), pages 497-525, April.
    11. Moyen, Stéphane & Stähler, Nikolai, 2009. "Unemployment insurance and the business cycle: prolong benefit entitlements in bad times?," Discussion Paper Series 1: Economic Studies 2009,30, Deutsche Bundesbank.
    12. Thomas C. Buchmueller & Helen Levy & Robert G. Valletta, 2021. "Medicaid Expansion and the Unemployed," Journal of Labor Economics, University of Chicago Press, vol. 39(S2), pages 575-617.
    13. Trine Filges & Lars Pico Geerdsen & Anne‐Sofie Due Knudsen & Anne‐Marie Klint Jørgensen & Krystyna Kowalski, 2013. "Unemployment Benefit Exhaustion: Incentive Effects on Job Finding Rates: A Systematic Review," Campbell Systematic Reviews, John Wiley & Sons, vol. 9(1), pages 1-104.
    14. Kyyrä, Tomi & Pesola, Hanna & Verho, Jouko, 2019. "The spike at benefit exhaustion: The role of measurement error in benefit eligibility," Labour Economics, Elsevier, vol. 60(C), pages 75-83.
    15. Hakola, Tuulia, 2000. "Navigating through the Finnish Pension System," Discussion Papers 224, VATT Institute for Economic Research.

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    More about this item

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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